MANHATTAN (CN) - A federal judge refused to grant Iran's central bank immunity from claims it transferred frozen assets to avoid a judgment for underwriting the 1983 Beirut Marine barracks bombing.
The decision by U.S. District Judge Katherine Forrest comes just two weeks before the 30th anniversary of the attack.
On the morning of Oct. 23, 1983, Hezbollah members ambushed a water delivery truck before it arrived at the barracks. A suicide bomber then drove a truck loaded with 19 tons of explosives into the compound and detonated his load, killing 300 U.S. and French service members.
Washington's former chief U.S. District Judge Royce Lamberth found Iran and its intelligence agency liable for the attack in 2007, but the laws at the time did not allow for punitive damages.
When Congress tweaked legislation to allow victims to seek punitive damages against a foreign nation accused of sponsoring terrorism, Lamberth awarded large money judgments in a series of cases, including a $2.1 billion judgment in Peterson v. Islamic Republic of Iran.
The families tried to collect the sum in the Southern District of New York, where a federal judge had previously ordered Citibank to freeze almost $2 billion in debt securities allegedly owned by Iran.
The lawsuit also accused the Luxemburg-based bank Clearstream and the Rome-based Banca UBAE of helping Bank Markazi, an agency of Iran, move $250 million in frozen assets outside the United States.
The families achieved success in the first prong of their lawsuit in late February, when Judge Forrest granted them summary judgment for turnover of $1.75 billion in blocked assets held in a segregated account at Citibank.
Originally filed under seal, the ruling was made public a month later.
Bank Markazi tried to defeat the remainder of the lawsuit by claiming protection under the Foreign Sovereign Immunities Act (FSIA) and insisting that U.S. courts lacked jurisdiction over the case.
Passed in 1976, President Gerald Ford signed the FSIA early the next year to give courts rather than executives the power to determine whether a foreign government should be immune from a lawsuit. This was intended to make such decisions less susceptible to politics.
Fatally for Iran's attempts to dismiss the claims, a subsection of the statute rejected immunity in cases where "money damages are sought against a foreign state for ... damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state," Forrest wrote.
Judge Forrest ordered that the case proceed to discovery.
David Lindsey, a lawyer for Chaffetz Lindsey LLP representing Bank Markazi, said that he could not immediately reply to a request for comment due to travel.
Lynn Smith Derbyshire, a spokeswoman for the victims of the bombing, said that the development shows "we're closer to justice now for our loved ones." Her brother, Capt. Vincent Smith, had just turned 30 years old when killed in the attack, she said.
She said that she could not speak to the possible difficulties ahead for collecting the judgment, or forcing the Iranian government to provide documents for the lawsuit. But she added that she wants the "perpetrators of the crime to experience some of the consequences of the crime."
"Obviously, you can't put a price on the life of somebody you love," she said. "I don't think that there is justice in that sense. I can't bring my brother back. You want them to have to pay for that. They just can't, 'Get away with murder,' so to speak."
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